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 Replies: 23 / Views: 2,307 |
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Valued Member
United States
287 Posts |
I heard on the radio yesterday that the IRS is charging the guy who caught the Barry Bonds home run ball a fairly sizable tax on the baseball even though it is rumored that the guy wants to keep it. But because of the tax, he is going to be forced to sell the ball because he could not pay the taxes on it. First of all I want to say this is crazy. The IRS is assuming a certain value on the ball. I understand why they are doing it, as if it had been the lottery they would rob him of 35-40% right away. But when you win the lottery, you have a set dollar amount given as your base. This is a baseball. It does not have a set value on it. If this person owns other balls that are official, maybe from a show or something, how are they going to know which ball it is? Will the new buyer know it is the real thing? It is not like a coin where it can be authenticated, as baseballs are plentiful on the field and off. What if he were to take four balls and juggle them in front of the TV camera? Is anyone going to know which one it is? Are they all worth a million dollars now? Of course not. The only way a ball can be of any value is if it can be proven 100% that it was the home run ball. It would need a chain of command, where more than one person can testify that they have kept track of the ball 100% of the time and that it is indeed "the" ball, and then it must be "slabbed" in a way that potential buyers will know if the slab has /has not been tampered with. After these conditions are met, the ball can only be valued by what someone is willing to pay for it. If he sells it to his kid for a dollar, should he pay $400,000 in taxes? What if it goes to auction and brings in less than the taxes the IRS assessed him? The IRS is wrong for taxing the baseball before he sells it. Like I said before, I know why they are doing it, but baseballs are not like coins. They cannot be authenticated in most circumstances because the the millions of generic balls out there, They have nothing to distinguish them from each other. If the IRS can do this to this guy, are they going to tax us on any coins that we find with a metal detector? Are they going to tax anyone that buys more than one First Ladies dollars as we might sell them for a profit on ebay? Or maybe they could charge us tax if we happen to buy more than one set that sells out at the mint. The day is coming when they will be assessing a tax on every ebay or coin auction we have. Maybe every transaction at a coin club meeting. Find that quarter on the sidewalk?.... better send in a nickel to the IRS. LOL What say ye? |
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Forum Dad
 United States
24150 Posts |
FYI, the balls were serial numbered and otherwise marked. It can be authenticated as "the ball". This ball is a "one of a kind". Right now it has no value. In my opinion, it can't be assigned a value until it's sold. You can "say" what its worth all you want, but until someone ponys it up, it's not worth what you "say". If someone were to find a 1791 Half Disme buried under the Philadelphia Mint when they tear it down in 2054, what's it worth? You have no idea, until someone forks up the green, assuming we're still using money then.  |
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Pillar of the Community
United States
1173 Posts |
I would add that, technically, if you find something of value and realize that value through sale of the item, you are supposed to report this "unearned income" and you will be taxed on it.
How many people actually report the income is certainly open to question, but the Feds could prosecute if they knew and cared to spend the time to do so.
I would guess they don't care much about a $50 find...but a $50,000 find...You bet.
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Bedrock of the Community
United States
12437 Posts |
quote:
I heard on the radio yesterday that the IRS is charging the guy who caught the B*rry B*nds home run ball a fairly sizable tax
IMO this is a new urban legend. There is no way the IRS could send someone a tax bill for what is essentially a "found" object that does not create an immediate windfall for the finder. It was not given to him, he did not inherit it, and he did not win it in a contest. The ball has no established value, only an actual auction selling the ball can establish its true value- it could sell for $10,000 or it could sell for $1,000,000. It all depends on the mood of the bidders and how historical they feel it is and how bad a particular person wants it on a given day. Upon sale, it should be taxed at either the income rate or capital gains rate. Personally, I believe that it should fall under the capital gains category. My reasoning for that is the fact that I would consider the ball to have a volatile value, much as stocks and other investments do, and also the fact that certain "collectibles" are subject to capital gains rules. If he sells now, capital gains tax rate will be highest and if held for more than a year, it falls to a lower rate. Of course, there is the risk that holding it too long for tax advantages might cause a drop in value (a B*nds federal indictment or positive test would kill the value more than likely). I know there have been various quotes going around in the media about this, but I think that this guy had some slimeball financial advisor or auctioneer whispering excrement in his ear so they could get their cut of the action and convincing the guy to sell as quickly as possible it the best way to go about that. Also, the guy could just be giving some song and dance routine about wanting to keep B*rry's ball forever except for the tax bill he is getting so he has to sell it asap, creating a story so he doesn't come off like an opportunistic schmuck  Edit: in order to be subject to capital gains, whether an investment or a collectible, the item MUST have been initially purchased, not found  It should be treated as income when the income is realized i.e. sold/auctioned. Edited by biokemist6
08/23/2007 6:15 pm
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Valued Member
United States
499 Posts |
I don't believe its an urban legend as the guy that owns it was on the news stating that this is the reason that he has decided to auction it. He stated that he could not afford the tax that the I.R.S. had assessed him.
Ziggy
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Pillar of the Community
United States
597 Posts |
Yes, unbelievably, it is not an urban legend but a fact. The IRS will tax this as income. I won't go off topic as to why the Treasury needs money. But the IRS has been billing people for these ball finds, and now this particular ball is being auctioned early next month, for the express purpose of paying the tax bill for the income it "presented" to the guy that caught it.
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Valued Member
United States
144 Posts |
I agree with Bobby and Biokem. I have heard of the IRS making similar statements recently, but also contradicting themselves in other cases. http://www.msnbc.msn.com/id/20186528/I would think it would be easy to challenge in court. If they did it, first you could easily challenge their method of assigning value. But say they picked a method, and you went along with it. Then, every year at tax time, you'd have to go through the same process again, getting a refund or paying more, as the value goes up and down. Then you'd have to apply that same reasoning to stocks, cars, your house, and pay taxes and get refunds as the value of each one goes up and down every year. And every coin in your collection. That's why they have the rule the gain must be "realized" first. |
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Pillar of the Community
United States
2335 Posts |
quote:
Then, every year at tax time, you'd have to go through the same process again, getting a refund or paying more, as the value goes up and down. Then you'd have to apply that same reasoning to stocks, cars, your house, and pay taxes and get refunds as the value of each one goes up and down every year. And every coin in your collection.
I think in this case the IRS is saying the ball is income, going along the lines of their position on game show winnings. Once you pay taxes on the income, the ball becomes an asset & any change in value would be unrealized. Any gain or loss would be counted as a taxable event only upon the sale of the asset. I'm not a CPA, & I don't play one on TV, so I could be wrong. |
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Bedrock of the Community
United States
12437 Posts |
quote:
I think in this case the IRS is saying the ball is income, going along the lines of their position on game show winnings
This is the point that I am trying to make- for it to be income, it has to have a definable dollar value and until then, it is just a "worthless" inanimate object. Anything you win on a game show will have a retail value or a value that can be calculated easily. A one-of-a-kind baseball(or coin) has a value that can ONLY be calculated by selling it. What if the guy decided to protest B*rry B*nds by blowing up the ball a'la the Cub's Steve Bartman ball? Do you really think the IRS could tax a guy thousands of dollars for a few burnt shreds of leather and twine? At that point, the whole ball is the equivalent of the burnt leather and twine shreds- the owner never realized a cent of profit from it and cannot be taxed until he does. |
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Valued Member
United States
367 Posts |
so if I'm at a little league game and I catch a $2.00 ball there gong to tax me? myself I think its crazy I say he caught it the government didnt help.
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Pillar of the Community
United States
7123 Posts |
The problem and mistake that this guy made was letting himself be known ,, pocket the stinking ball and go home ,stay away from the media,,and publicity,, let all that happen when you sell the ball .
sometimes being an unknown is the right way to be known !
whats really sad is if the ball sells for more than the estimate then the tax burfen will rise accordingly .
Metalman
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Pillar of the Community
United States
936 Posts |
What if the record is broker again? What if it is found he uses steroids and the record becomes invalid? The value of that ball would drop dramatically. I just do not get it.
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Forum Dad
United States
24150 Posts |
quote:
The problem and mistake that this guy made was letting himself be known, pocket the stinking ball and go home ,stay away from the media,and publicity, let all that happen when you sell the ball.
Unfortunately he was immediately escorted out by armed guards, so this would be pretty much impossible. |
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Bedrock of the Community
United States
20753 Posts |
I have to agree that this guy is also looking for attention or he would have done as just mentioned. Go home, put it on a mantle and shut up. If it can be authenticated, then have that done and then go home and shut up. It is probably just another word of mouth garbage story about the IRS.
If the IRS really wants some money, they should consentrated on all the under the table money being passed around most politcal buildings. Most government officials. Most government rewarded contractors. Now there is where the Millions and millions could be taxed. But for a ball?
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Valued Member
 United States
287 Posts |
If this guy donates the ball to the Baseball Hall of Fame, will he still be taxed? or will he have to take it as a write off? |
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Valued Member
United States
259 Posts |
Seems like a reputable source to me: http://www.newsday.com/sports/baseb...703959.storySports memorabilia experts say it would sell for about half-million dollars, but IRS is being coy as to whether he will owe anything even if he doesn't sell. Shame that you catch a historic ball and have to go out and hire a tax lawyer. |
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Replies: 23 / Views: 2,307 |
Posted 08/23/2007 1:23 pm
